In 1995 the Japanese yen was trading at 93.96 yen per dollar and by the summer of 1998 the yen/dollar exchange rate stood at 140.79, having risen in every year of the 1995-98 period. What economic and financial factors would likely have contributed the most to this sharp fall in the exchange value of the Japanese yen against the U. S. dollar _____ Using the demand and supply framework shown in Exhibit 25- 5 illustrate diagrammatically how the economic and financial factors you cited above would have lowered the international value of the yen vis-a-vis the American dollar. Should the Bank of Japan have intervened more aggressively during this period of erosion in the value of the yen _____ Why or why not?

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The Answer of In 1995 the Japanese yen was trading at 93.96 yen per dollar and by the summer of 1998 the yen/dollar exchange rate stood at 140.79, having risen in every year of the 1995-98 period. What economic and financial factors would likely have contributed the most to this sharp fall in the exchange value of the Japanese yen against the U. S. dollar _____ Using the demand and supply framework shown in Exhibit 25- 5 illustrate diagrammatically how the economic and financial factors you cited above would have lowered the international value of the yen vis-a-vis the American dollar. Should the Bank of Japan have intervened more aggressively during this period of erosion in the value of the yen _____ Why or why not?

In 1995 the Japanese Yen Was Trading at 93